When hiring, it’s essential to understand that there are various employment types to consider, and rules and rights differ depending on the type.
In Norway, the default form of employment is full-time permanent employment. Other employment types include:
- Part-time employment
- Fixed-term employment
- Temporary agency work
Each of these employment types is subject to statutory protection.
Specifically for fixed-term employment, it is important to note that such employment is conditioned upon the expiry being defined by objective criteria, such as being:
- A substitute employment
- A traineeship
- Part of a labour market scheme
Under certain conditions, a fixed-term employment may convert into a permanent position. In this connection, the main rule is that the employment will become permanent after more than three years.
Your company is generally free to design job advertisements and select candidates at your discretion.
However, the recruitment process is subject to certain restrictions, including rules related to discrimination, data protection, and preferential rights.
As part of preparing for interviews, most companies collect information about the applicant from various sources, including the applicant directly, previous employers, educational institutions, and other third parties.
As a main rule, your company should avoid collecting information relating to:
- Pregnancy
- Age
- Ethnicity
- Health or disability
- Religion or faith
- Political opinions
- Sexual orientation
- Gender identity or expression
- Trade union membership
Depending on the job, certain information may be processed. Such data may relate to health, language skills, or family life.
Many companies conduct background checks as part of the recruitment process. Often, information collected as part of such checks includes:
- Identity
- Education
- Employment
- Credit check
- Criminal records
Your company can conduct background checks, subject to certain limitations. Such limitations, namely, arise from the data protection rules.
The main requirements include that your company must inform job applicants of the circumstances relating to the background check in accordance with Articles 13 and 14 GDPR and secure a lawful basis for each processing activity.
Special considerations apply before obtaining one of the different types of criminal records, which include the following types of records:
- Standard certificate
- Limited certificate
- Comprehensive certificate
- Extended certificate
There must be a legal basis for processing such records (e.g., a case for work within the security sector, schools, or the childcare sector). In this connection, it should be stated in the job advertisement that a criminal record is a requirement for the position. Criminal records must be obtained directly by the job applicant and cannot be issued to a third party.
Employees have the right to receive written notification of all material terms of employment.
Information must be provided as soon as possible, and for employment relationships with a duration of more than one month, no more than seven days after the commencement of employment.
As a minimum, the written notification must include details relating to the following categories:
- Name and address of the parties
- Workplace
- Details of the work, title, or category
- Start date
- Duration, if not permanent
- User company, if agency worker
- Details on trial period, if any
- Holiday rights
- Rules on termination
- Compensation, time, and form of payment
- Daily or weekly working hours
- Unpredictable work patterns, if any
- Training entitlement, if any
- Social security
- Collective agreement, if any
Other material terms and conditions of employment must also be listed. Implied terms apply subject to statutory protection, including, for example, the duty of loyalty and the duty of confidentiality.
Additional information must be provided to posted employees and to employees stationed abroad for longer than four consecutive weeks.
The process for introducing a unilateral change depends on whether the change is material or not.
Whether a change is material and objectively justified must be assessed on a case-by-case basis.
Depending on the circumstances, examples may include changes negatively affecting:
- Salary
- Workplace
- Bonus or incentives
- Holidays
- Area of responsibility
Unilateral material changes to the terms and conditions of employment constitute a constructive termination. Consequently, your company will need to follow the statutory termination process to implement the changes.
That process includes individual discussion meetings, a formal notice of termination, and an offer of employment on new terms. Changes will be effective upon the expiry of the notice period. Employees who decline the change can consider themselves terminated, and depending on whether the material change was objectively justified, may be entitled to compensation for unjustified termination.
Changes that are not material can be introduced without notice, or with reasonable notice, depending on the circumstances.
The process for introducing a unilateral change depends on whether the change is material or not.
Whether a change is material and objectively justified must be assessed on a case-by-case basis.
Depending on the circumstances, examples may include changes negatively affecting:
- Salary
- Workplace
- Bonus or incentives
- Holidays
- Area of responsibility
Unilateral material changes to the terms and conditions of employment constitute a constructive termination. Consequently, your company will need to follow the statutory termination process to implement the changes.
That process includes individual discussion meetings, a formal notice of termination, and an offer of employment on new terms. Changes will be effective upon the expiry of the notice period. Employees who decline the change can consider themselves terminated, and depending on whether the material change was objectively justified, may be entitled to compensation for unjustified termination.
Changes that are not material can be introduced without notice, or with reasonable notice, depending on the circumstances.
There is no statutory minimum salary. However, collective agreements often include regulations on minimum salary entitlements and compensation.
That means that there is no obligation to regulate salaries annually. The salary level is subject to individual agreements unless an applicable collective agreement states otherwise.
Salary levels must always be set in accordance with the Norwegian Gender Equality and Anti-Discrimination Act, which requires that employees receive the same pay for the same work or work of equal value.
It is a statutory requirement that the monthly salary must, as a main rule, be paid by bank transfer to the employee’s bank account.
Incentive schemes take various forms, but usually include:
- Commission
- Discretionary bonus
- Target bonus
- Retention bonus
- Cash-based schemes
- Share-based schemes
Cash-based schemes may include LTICs or phantom stocks, while share-based schemes may cover stock options, warrants, free shares, restricted stocks, or RSUs.
Bonus schemes can take various forms but are usually either discretionary or based on targets. Discretionary bonus schemes often present special challenges when the bonus is paid over several years, as employees may have acquired a right to the bonus. If the bonus has varied from year to year, employees may have an entitlement to an average amount.
Entitlements in connection with termination may apply irrespective of the incentive scheme. In Norway, employees may be entitled to a prorated amount of the incentive if the scheme does not regulate the terms and conditions in connection with termination.
Typically, the weekly working time is 37.5 hours, corresponding to a daily working time of seven hours and 30 minutes.
Average working hours within a seven-day period, as calculated over eight weeks, must not exceed 48 hours.
Daily rest periods of at least 11 hours must be in place within each 24-hour period.
Weekly rest periods must be at least 35 hours within a seven-day period.
Employees who work more than five hours and 30 minutes daily are entitled to a break. The break must last at least 30 minutes when the working hours are at least eight hours.
Working time registration obligations apply, which entail reporting of the daily working hours in a system. Your company can choose how to set up the reporting system. Employee representatives must have access to the information.
Employees are entitled to 25 days of statutory holiday each year, corresponding to four weeks and one day of holiday.
Holidays are to be taken during the holiday period, from 1 January to 31 December. Special holiday conditions apply to employees who start their employment after 30 September.
Paid holiday rights are accrued during the accrual year, from 1 January to 31 December in the year before the holiday period.
The right to paid holiday is a holiday allowance, corresponding to 10.2% of the annual salary, excluding the portion exceeding 6 G. For employees over the age of 60, the holiday allowance percentage is increased by 2.3%.
The scheduling of holidays is subject to discussion, but your company has the final decision. That said, employees can require 18 consecutive days to be taken between 1 June and 30 September. Employees can also require that the remaining holidays be taken as consecutive days. Employees are entitled to two months' notice before the holiday starts, unless special circumstances apply.
Special terms and conditions apply to accrued, untaken holidays at the end of the holiday year, as well as in connection with the termination of employment.
It is common to offer five additional days of holiday, so that employees have a total of five weeks. Special rights apply to employees over the age of 60.
Employees have statutory rights to flexible working arrangements under the Norwegian Work Environment Act, subject to certain conditions.
Parents with one or more children under the age of nine may request flexible working arrangements, subject to certain conditions.
Your company must consider this request and respond within a reasonable timeframe. Generally, the request should be approved unless the arrangement will result in significant inconvenience.
Flexible working entitlements also apply to employees who are:
- From the age of 62
- Having health, social, or certain other reasons
- Breastfeeding
- Caregivers
- Assisting a member of their household with a serious medical condition
Each flexible working entitlement is subject to underlying conditions.
Employees are entitled to sick leave during their employment.
However, paid sick leave rights depend on the duration of the sick leave:
- Salary as usual during the first 16 days
- After that, sick leave benefits
Sick leave benefits to other employees are paid directly by the Norwegian Labour and Welfare Administration, subject to certain conditions.
Your company may need to comply with certain statutory obligations during an employee’s sick leave, including:
- Dialogue meeting one within seven weeks
- Dialogue meeting two after 26 weeks
- Rehabilitation plan (within four weeks)
Note that when employees receive their salary during sick leave beyond the employer period, your company may be eligible for reimbursement. Conditions include that the employee must have been sick for 16 consecutive days (“employer period”). When applicable, your company will receive the sickness benefits that the employee otherwise would have received, up to 6 G.
Employees have the right to parental leave and benefits related to childbirth and adoption, subject to specific conditions.
In connection with childbirth, the employee giving birth is entitled to leave up to 12 weeks prior to the expected date of birth (pregnancy leave).
After childbirth, employees are entitled to 100% pay for 49 weeks or 80% pay for 61 weeks and one day. Employees have statutory rights to extend their parental leave for up to 12 months each, subject to certain conditions.
In connection with adoption, the leave starts when they assume care of the child. During that period, employees are entitled to 100 % of their salary for 46 weeks or 80 % pay for 58 weeks and one day (adoption leave).
Notification requirements apply to both sides in connection with planning the parental leave.
Employees have leave rights, depending on their circumstances, and are subject to certain conditions.
Besides parental leave and sick leave, such statutory leave rights include:
- Extended parental leave
- Leave for breastfeeding
- Leave for urgent family reasons
- Carers leave
- Caregiving leave
Many companies may also offer such leave, either in full or in part, with pay, subject to reimbursement. Other leave that companies often offer in practice also includes the right to leave in connection with:
- Moving
- Wedding
- Exams
- Funeral
- Non-statutory holidays
Many companies want to include a non-competition and/or non-solicitation of customers clause in the employment contract.
The Norwegian Working Environment Act governs restrictive covenants.
Non-solicitation of customer clauses can be agreed upon for any employee and apply to customers with whom the employee has had business-related contact within the 12 months preceding the termination date.
Non-competition clauses can be agreed upon for employees where the clause is necessary to safeguard the company’s business interests. Different elements, including their position, will play into the assessment of whether that is the case.
Each clause can have a maximum duration of 12 months.
Employees must be reasonably compensated for non-competition clauses, corresponding to their salary up to 8 G, and 70% of what exceeds 8 G, as a minimum. Compensation can be limited to 12 G. If the employee obtains other suitable employment during the term, compensation can be reduced by up to 50% of the agreed amount.
No-hire clauses (also known as “non-poaching” or non-solicitation of employees” clauses) are unlawful, except in very specific circumstances.
When your company needs to terminate an employee, the process is subject to certain notice periods and procedural rules.
Minimum statutory notice periods apply, subject to seniority:
- Under 5 years: 1 month’s notice
- Up to 10 years: 2 months’ notice
- Over 10 years: 3 months’ notice
After 10 years of employment, the notice period is extended subject to age:
- From 50 years: 4 months’ notice
- From 55 years: 5 months’ notice
- From 60 years: 6 months’ notice
Your company can either terminate an employee for reasons related to your business (e.g., redundancy or restructuring) or reasons related to the employee (e.g., performance or misconduct).
Depending on the circumstances, employees may submit a claim for compensation due to unjustified termination.
Statutory termination entitlements vary, and different rights apply depending on whether the employee is subject to a collective agreement or has special individually agreed-upon terms.
Establishing a whistleblower routine is required when your company has five or more employees or if business circumstances make it necessary.
Pursuant to the Norwegian Work Environment Act, such whistleblower routines must be in writing and, as a minimum, include:
- Encouragement to report on critical matters
- Information on steps to report
- Procedure for the processing of reports
Your company must establish such routines as part of the work with the systematic work environment.
Whistleblowers must have access to report on critical matters, which may include circumstances that can result in:
- Danger to life or health
- Damage to the climate or environment
- Corruption or other economic crimes
- Abuse of authority
- Unsafe work environment
- Personal data security breaches
Employees who report under the Norwegian Work Environment Act are protected against retaliation.
Employees can also report via external whistleblower schemes.
Different circumstances in your company may require you to facilitate the election of employee representatives in practice.
When your company has 50 or more employees, you are subject to the duties of informing and discussing important questions with the employees under the Norwegian Work Environment Act.
When your company has an average of 30 employees, employee representatives can be elected to the board at the initiative of the employees.
When your company has one or more employees, health and safety representatives must be elected for the work environment organisation, but when you have fewer than five employees, exceptions apply, subject to a written agreement.
When your company has 1,000 or more employees across the EU/EEA and a minimum of 150 employees in two or more EU/EEA countries, you may be required to establish a European Works Council.
Pursuant to the Norwegian Work Environment Act, a transfer of an undertaking occurs when a company or part of a company transfers to a new employer but retains its identity after the transfer.
Employees covered by the transfer have the right to transfer with the business to the new employer (“transferee”). The transferee, therefore, becomes liable towards the employees who transfer.
Information and consultation requirements apply in connection with such a transfer, including an obligation upon the company that transfers (“transferor”) to notify employees of:
- Transfer date (or suggested date)
- Reason for the transfer
- Legal, economic, and social consequences
- Measures towards the employees, if any
Terminations due to a transfer of an undertaking are not reasonably justified in your company’s circumstances unless it is objectively justified in your company’s circumstances.
Special requirements apply when collective agreements are in place, including the ability for the transferee to renounce the transferor’s collective agreement within three weeks of the transfer.
Employee representatives generally retain their title in connection with a transfer.
Pursuant to the Norwegian Working Environment Act, your company must follow a statutory process when terminations over a 30-day period may affect ten or more employees.
Note that exits via severance agreements may count in the threshold, subject to certain conditions.
Obligations include a duty to consult with employees or employee representatives to attempt to reach an agreement that avoids or limits potential mass redundancy and minimises the consequences for those affected.
In this connection, information must be shared in writing on the circumstances surrounding the mass redundancy. Information must be shared concurrently with the Norwegian Labour and Welfare Service (NAV).
If the intention remains to complete the terminations after the consultation process, NAV must be notified.
Termination in connection with mass redundancy will take effect no earlier than 30 days after NAV has been notified.
Collective agreements are agreements that outline the working conditions applicable to a specific company or industry.
The parties to collective agreements are usually a trade union on one side and a company or an employers’ organisation on the other.
There is no statutory requirement to comply with or conclude a collective agreement, except for collective agreements that are generally applicable.
Collective agreements contain different terms and conditions, providing a framework for the rights and obligations. Terms usually relate to working time, pay, overtime, holidays, and pension. Other conditions may relate to the work environment and dispute resolution.
Supplementary rules also form part of such agreements. Those supplementary rules provide an additional basic framework for cooperation under the collective agreement, with additional obligations that your company must comply with.
Companies without a collective agreement can expect to be approached by a union with the aim of entering into a collective agreement. Your company can then negotiate on an individual basis or join an employers’ organisation, which will negotiate on your company’s behalf.